Walgreens Boots Alliance (NASDAQ: WBA) is a global leader in retail pharmacy, operating in over 25 countries. The company provides a wide range of pharmacy and healthcare services. Walgreens competes with other major pharmacy chains like CVS Health and Rite Aid. Recently, Walgreens announced its Q2 2025 earnings, which are among its last as a public company.
On April 8, 2025, Walgreens reported an earnings per share (EPS) of -$3.30, falling short of the estimated $0.32. Despite this, the company achieved revenue of $38.59 billion, surpassing the expected $37.90 billion. This revenue growth is part of Walgreens' ongoing turnaround efforts, as highlighted by Fast Company, as it prepares for acquisition by a private equity firm.
Walgreens' sales increased by 4% during the quarter ending February 28, 2025, contributing to a reduction in its operating loss. This improvement is a result of the company's strategic cost-cutting measures aimed at enhancing operational efficiency. Despite a negative price-to-earnings (P/E) ratio of -1.58, the company is focused on stabilizing its financial performance.
The company's financial metrics reveal some challenges. Walgreens has a high debt-to-equity ratio of 4.24, indicating significant debt compared to its equity. Additionally, the current ratio of 0.61 suggests potential liquidity issues in meeting short-term obligations. However, the low price-to-sales ratio of 0.06 suggests the stock may be undervalued relative to its sales.
As Walgreens transitions to a private entity, it aims to improve its financial stability. The enterprise value to sales ratio of 0.25 and enterprise value to operating cash flow ratio of 24.16 provide insight into the company's valuation compared to its revenue and cash flow. Despite a negative earnings yield of -0.63%, Walgreens is working towards a more sustainable financial future.
